With a little more than a month away from Hinds County Circuit Judge Bobby DeLaughter’s corruption trial, the U.S. attorney’s office is bringing in witnesses imprisoned for their roles in attempting to bribe a different judge…Records from the Bureau of Prisons show Timothy Balducci has been moved from his prison in South Carolina to a transfer facility in Oklahoma…Balducci was the one who tipped off the FBI to the DeLaughter case.
So, Balducci tipped off the FBI a high stakes game of Let’s Make a Deal and the Minor bribe he offered Judge Lackey stays behind door #2!
The obviously clairvoyant Langston pleads guilty, claims he has all the answers, changes the game to Jeopardy and the Tower of Babble begins to build. Patterson makes three to plea – but he’s no game changer and doesn’t seem to be much of a player – so, he just babbles.
Two P’s in a pod? Not. But, Peters comes next and pays to play. The game changes to Charades. Scruggs appears guilty of attempted flattery but pleads to mailing the Court the paperwork required for Langston and Balducci to make an appearance. The Tower of Babble with Delaughter not and Witness accounts seem to conflict.
Through his lawyers, Scruggs seemed to discount the prosecution’s case in their response to Wilson last week in the civil action: “Wilson assumes that Scruggs corruptly influenced Judge DeLaughter in his rulings. Scruggs has pleaded guilty to attempting to corruptly influence Judge DeLaughter in his rulings, but Wilson has presented nothing to connect this attempt with actual influence or to any such influence with any harm to Wilson.”
What if Ed Peters falls apart on the stand? This question has been bouncing around in my head for awhile now. Absent a smoking gun email, doesn’t the Government’s entire case rest on the word of Ed Peters? After all, neither Scruggs, nor Joey Langston, nor Balducci, nor Patterson can testify to having a conversation with DeLaughter. What if Peters does not? Similar pro-Scruggs sentiments came out early on Tim Balducci (as he was the only one with contact with Lackey – by design, I might add).
Horrors! What if people have to look at the evidence?
I deny the accusations in your letter dated July 27, 1994. You
and Alwyn have cooked up this whole case in a desperate effort to
coerce still more money out of me. Your counter-claim/cross-claim
is a clear and disingenuous attempt to repudiate the agreement
under which you have received largely unearned fees since late
1992. After repudiating the agreement, you now ask me to perform.
In 1984, Richard F. Scruggs and William Roberts Wilson, Jr. agreed to associate one another in a number of asbestos-related personal injury cases. Accordingly, they formed an intermediary corporation in1985 known as Asbestos Group, P.A. In 1986, Asbestos Group hired Alwyn H. Luckey as a staff attorney.
However, the fee disputes with Scruggs are not about getting in and, other than this comment from John Keker, much of what is known about reasons for the various fee disputes (or guessed, as the case may be) comes from those who found themselves on the outside looking in at big tobacco.
Fee disputes among plaintiffs’ lawyers aren’t uncommon. Allies of Mr. Scruggs say that for him, such disputes involved a minority of former associates, people who grew greedy once Mr. Scruggs landed blockbuster settlements. “In these situations people want more money,” says Mr. Keker, his lawyer. “Flies come around buzzing and think that their contribution is more than it is.”
In any case, the allegations of shortchanging came following the successful conclusion of cases. Beforehand, while legal success was uncertain, Mr. Scruggs sometimes paid handsomely for aid that could help bring victory.
I’m genuinely surprised by the difficulty Scruggs faces in defending these disputes once they go to court.
The Supremes provided additional background in their ruling on a Jackon County court decision appealed by Scruggs.
In October of 1988, Wilson, Wilson, P.A.,Scruggs, and Scruggs, P.A., gave Luckey 5% of the stock, thereby decreasing Wilson and Wilson, P.A.’s interest to 47.5% and decreasing Scruggs and Scruggs, P.A.’s interest to 47.5%; (3)
In 1990, Luckey acquired an additional 10% of the stock, increasing his interest to 15%. Wilson and Wilson, P.A.’s interest was decreased to 40%, and Scruggs and Scruggs, P.A.’s interest was decreased to 45%; and
The “business relationship . . . existing between Wilson[and Wilson, P.A.] on one hand and Scruggs [and Scruggs, P.A.] and Luckey on the other hand is terminated . . . .”
In 1993, Scruggs fired Luckey. In April of 1994, Luckey hired Merkel & Cocke to represent him in a suit against Scruggs and Wilson. This suit was filed in the Circuit Court of Hinds County.
This next bit of information fills in the time line.
In 1992, they signed an agreement to divide future fees from pending cases.
Luckey’s suit sent off the chain of events that ultimately resulted in Judge DeLaughter’s indictment. However, the chain is not always easy to follow or understand – nor is the eventual decision in July 2005, a little over a month before Hurricane Katrina.
On Wednesday Chief Magistrate Judge Jerry Davis awarded Alwyn Luckey of Jackson County more than $13 million to be paid by renowned anti-tobacco litigator Richard “Dickie” Scruggs and associated law firms. The money represents Luckey’s portion of an old and disputed partnership with Scruggs.
Scruggs and the firms – Scruggs PA, Scruggs Millette Lawson Bozemen and Dent PA, and Asbestos Group – also will have to pay attorneys’ fees and some court-approved expenses.
“The court could award punitive damages,” Davis wrote in his decision, “but finds that the award of attorney’s fees and expenses is sufficient.”
Neither side may talk about the settlement; that was one of the ground rules Davis established before the hearing began. Davis also said there would be no appeal, and that any payment for damages would be made in a lump sum.
The case brings to an end a 12-year struggle between Luckey and Scruggs through state and federal courts.
Luckey said Scruggs owed him money from his 25 percent share of Asbestos Group, a firm created in the late 1980s to deal with asbestos medical claims. At the time, that was $800,000 in fees alone. It didn’t count the work or value of the firm.Luckey had contended the Asbestos Group was absorbed by Scruggs into another law firm, and that firm used the money to launch tobacco litigation in Mississippi and Texas.
“Scruggs has received tens of millions of dollars in attorneys fees for his participation in the tobacco litigation enterprise,” Luckey claimed in pleadings to the court, “and its prosecution of claims against tobacco companies in this court.”
Scruggs, on the other hand, argued that Luckey deserved no portion of Asbestos Group. Scruggs fired Luckey in 1993 because, according to Scruggs’ testimony, Luckey had tried to have some dates changed on medical records dealing with asbestos claims, and staffers at Asbestos Group had refused.
Said Davis, “The court finds and notes that the plaintiff does not challenge that Scruggs had adequate grounds to terminate his employment.”
But Luckey wasn’t contesting his firing; instead, he wanted his percentage of the group and the fees he had earned.
Before Luckey’s firing, Scruggs had learned from another attorney that the Asbestos Group might have problems if the partnership signed up clients. So, Scruggs and Wilson signed up the clients and Asbestos Group managed the cases.
In effect, Scruggs argued in pleadings, Luckey had 25 percent of nothing, because Asbestos Group wasn’t bringing in clients. “And even if Luckey were right on his partnership’ analysis,” Scruggs maintained in court documents, “misconduct would terminate rights to future partnership income.”
But Davis recognized Luckey as a partner. That meant the question centered on the effect the firing had on the relationship between Scruggs and Luckey, and whether Scruggs owed Luckey the fees after termination. It didn’t have anything to do with why Scruggs fired Luckey.
Scruggs never dissolved Asbestos Group, said Davis, and from the date of termination in June 1993 until the present, Luckey should have received 25 percent.
Instead, the judge said, Asbestos Group was “absorbed by successive professional corporations of Scruggs, which has complicated both the discovery in this case and the computation of the money” owed to Luckey.
In the end, the judge computed it this way: $13,588,907.92 for Luckey, plus the fees. (emphasis added)
The most incredible part of this decision is Judge Davis acknowledges and then ignores Luckey’s undisputed misconduct and rules in his favor.
However, Luckey’s undisputed misconduct appears to have posed no barrier to his success:
In 1993, Alwyn set up his own practice in Ocean Springs, Mississippi, where he still practices today. Since striking out on his own, Alwyn has been a leading participant in a landmark asbestos case known as Cosey that was tried in 1998 and received a record verdict of $56 Million. Considered to be one to the pioneers in mass tort litigation in both the state of Mississippi and the country, Alwyn represents thousands of asbestos and silica clients. To date, he has been able to recover well over $150 Million on behalf of them.
Wilson’s story, more familiar because of Langston’s related confession and guilty plea, has even more twists and turns.
Luckey split away from Scruggs and sued Scruggs and Wilson, claiming they cheated him out of fees.
Wilson countersued, claiming Scruggs sent him 10 percent from settlements under the separation agreement when he should have sent 40 percent.
Scott Taylor, an attorney working for Scruggs, told Scruggs that as he interpreted the agreement, Scruggs didn’t owe Wilson anything.
In fact, Taylor said, Wilson owed Scruggs. Scruggs then stopped paying Wilson, though he escrowed certain sums.
Seven years into the suit, Wilson sought to amend his counterclaim and seek a share of the tobacco windfall. He argued that fees Scruggs withheld from him supported tobacco litigation.
Circuit Judge Breland Hilburn denied the claim, ruling that any issue of tobacco fees was not properly before him. Wilson bounced to Texarkana, Texas, and sued in federal court to recover tobacco fees. Back in Jackson Hilburn declared that the issue was before him after all, and he denied Wilson’s claim.
The tactic did not go over well in Texarkana, where U.S. District Judge David Folsom ruled that Scruggs wanted to have his cake and eat it. Folsom declined jurisdiction, however, sending Wilson to federal court in Jackson.
U.S. District Judge Tom Lee of Jackson accepted jurisdiction, concurring in Folsom’s assessment of Hilburn’s “sudden about face.” In 2002, the Hinds County case rose to the Mississippi Supreme Court, where the Justices struggled for three years to sort it out. They never did sort it out, for in 2005 the feuding lawyers dismissed all appeals. They agreed that Luckey would switch his claim to federal court at Oxford.
That summer, Hurricane Katrina demolished Scruggs’s home. By then Hilburn had retired and DeLaughter had taken Wilson’s case. Jack Dunbar, representing Scruggs at a hearing before special master Robert Sneed, said DeLaughter’s decision wiped out all of Wilson’s claims except breach of contract.
Sneed stunned Scruggs by recommending that Wilson receive 40 percent of all settlements, including some where Wilson had pleaded for 10 percent.
Scruggs couldn’t challenge the recommendation as a misinterpretation of the contract, for DeLaughter had declared it clear and unambiguous. Only DeLaughter could pull Scruggs out of the trap.
Steve Funderburg, representing Scruggs as a member of Jones’s firm, urged DeLaughter to reject Sneed’s recommendation. “Wilson is getting a better deal than he negotiated,” he wrote in a brief on Jan. 19, 2006.
Langston’s name appeared below Funderburg’s signature. Ten days later, Langston and Balducci entered appearances for Scruggs. DeLaughter rejected Sneed’s recommendation…
Wilson moved to compel production of tax returns. DeLaughter denied the motion and sanctioned Wilson and Slater, ordering them to pay Scruggs’s lawyers for the time they spent fighting the motion.
Scruggs moved to ban testimony and evidence about the tobacco case pending in federal court, claiming it would confuse jurors. For Wilson, Charles Merkel answered that if DeLaughter granted the motion he might as well grant summary judgment for Scruggs.
DeLaughter granted the motion. As trial started on Aug. 21, 2006, Scruggs offered Wilson almost $500,000. Balducci handed DeLaughter a sealed envelope and said the figures in it would justify the payment. DeLaughter adopted the contents of the envelope.
Balducci said, “There is no need for us to endure the further proceedings in this court.” He said Wilson could no longer ask for compensatory damages and thus could not claim punitive damages. Merkel sputtered, “You can’t take someone else’s money, hold it for eleven years and two months and then when the matter is headed for the courthouse, trot in, pay the amount you have owed the entire period of time and say no harm, no foul.”
Langston said Wilson violated the contract by suing Scruggs. “We made payments each time we had an opportunity to become aware of what actually was due,” he said. At that point, Wilson couldn’t win a nickel but Scruggs could try to persuade jurors that Wilson owed him.
DeLaughter told Merkel and Slater he could hold trial for “bragging rights.” The next day, Langston announced a settlement.
Scruggs would pay Wilson a confidential sum, Langston said, and Wilson would dismiss his state and federal claims.
The Special Master recommended giving Wilson money he was not entitled to receive and, in some cases, did not request.
Judge Delaughter did not accept this recommendation.
The Government filed a Motion in Limine to prevent the jury from hearing the issue:
Evidence that all DeLaughter’s rulings were not contrary to law could reasonably be expected to take weeks of trial time. Because it would “convey no useful information,” the government respectfully suggests that such evidence would be both irrelevant and immaterial and should therefore be excluded.
Tell you what – just pick this one. After all, that’s the one that the jury needs to hear and it can be told in a minute flat.
After all the money and time expended thus far, what was the purpose other than taking this case to a jury? If it takes a few weeks to hear both sides, it should not matter or, if it does, there should not be time for the Tower of Babble either.
Case documents will be posted as time permits – and that will not take a couple of weeks either.